CMA CGM raised the bar in the second quarter

Par thierno - 9 September, 2020 - 16:24

CMA CGM turned the corner in the second quarter

The second quarter of 2020 would have played tricks on the CMA CGM group. Like many of its colleagues and competitors, it has managed to turn things around despite a drop in turnover and is confident for the last quarter.

CMA CGM has managed to get through an atypical second quarter in 2020, marked by the confinement of the market, with a 10% decline in revenues but a rebound in its Ebitda of more than 25%.

The French group, for which shipping represents a third of its activity, lost 9% over the period, to 7 billion dollars (5.94 billion EUR), against 7.7 billion USD in 2019.

This decline is due to the phenomenon of the global health crisis, which has reduced the volumes to be transported for the liner sector.

The world's fourth largest shipowner recorded 4.7 million TEUs during this quarter, 13.5% less than last year (5.5 million TEUs).

However, its Ebitda improved by 26.3%, from USD 953 million in the second quarter of 2019 to USD 1.2 billion this year.

The group's results are back in the black

The group posted a net profit of USD 136 million, compared with a loss of USD 109 million last year. The reasons for the difference between the decline in sales and the improved results in the second quarter are becoming a classic in the second quarter. In addition to the average increase in freight rates in the sector, the decrease in oil prices played a major role.

CMA CGM estimates unit operating expenses per TEU at USD 892. This is 4.6% lower than in the second quarter of 2019.

As for its liquidity, it has been strengthened by a guaranteed bank loan of EUR 1.05 billion.

The group recalls having implemented the "simplification of its brand strategy". After focusing on the transpacific lines, it wants to become "the only global carrier in the group" while retaining a few brands. This is the case of APL for the United States, ANL for Australia, CNC for Intra-Asia, Mercosul for Brazil and Containerships for Europe.

Increase in Ebitda for Ceva Logistics

In terms of transport and logistics commissions, the Ceva Logistics subsidiary's sales in the second quarter declined by 4.7% to USD 1.7 billion due to the health crisis, estimated at USD 7 million.

However, its Ebitda was USD 153 million, up 4.1% compared with the second quarter of 2019.

The group highlights in particular the good results of the air freight business with the chartering of aircraft made necessary following the closure of regular lines due to the health crisis.

However, in terms of contract logistics, "Ceva Logistics' results were penalized during the quarter by the pandemic, which led to the closure of many sites", says CMA CGM's management.

The benefits of lower oil prices

The group is confident for the last quarter of the year. Even if, in its view, as for many other players, "the situation remains uncertain", it expects good prospects for this period.

"Despite the pandemic linked to Covid-19, our group recorded excellent results in the second quarter, confirming our financial structure. (...) We also significantly reduced our costs and benefited from the fall in oil prices.

CEVA Logistics' plan to return to profitability is also continuing in line with our expectations", explained its CEO, Rodolphe Saadé. "We are in a good economic climate" and "relatively calm for 2021", he added.

Vincent Calabrèse